Humber Valley Paving not the only company released before completing work in Labrador
Humber Valley Paving has not been paid by the provincial government for any work it has not completed.
That point was made in payment information provided to The Telegram and repeated to reporters Thursday by Premier Tom Marshall and Transportation and Works Minister Nick McGrath, following a CBC report noting Humber Valley Paving was granted early release from a contract for roadwork on the Trans-Labrador Highway.
A fleet of vehicles parked outside the Humber Valley Paving office on White Lane Road in the Watson’s Pond Industrial Park area Thursday.
— Photo by Geraldine Brophy/The Western Star
Response to the story included a statement issued by Liberal MP Yvonne Jones saying the company — where incoming premier Frank Coleman had a leading role until March 10 — received “a fistful of cash” for work never completed.
“While Coleman was in charge, the government contracted him to pave 80 kilometres of highway for $19 million. Instead, the company only completed 20 kilometres, but still got paid 60 per cent of its contract, or $12 million. This simply does not pass the smell test,” said Jones, adding she was disturbed by information reported on the province’s dealings with the private paving company.
Liberal MHA Lisa Dempster also called the contract decision into question.
And provincial NDP Leader Lorraine Michael said in a statement she was similarly disturbed with the information available.
“I think this decision sets a dangerous precedent for dealing with contractors in the future, and I would like to see the auditor general examine the entire matter,” she said.
The NDP statement said a $9.5-million bond posted on the road contract had been returned to the company in full.
But according to the minister responsible, nothing could be further from the truth.
“One of the perceptions that’s out there in the general public is that government gave back the bond money to Humber Valley Paving. That’s a false statement,” said McGrath.
And payment made to the company, he said, was a reflection of the level of work completed.
As part of contract information previously provided by the Department of Transportation and Works to The Telegram, it was noted Humber Valley Paving was awarded a contract in May 2012 to pave the Trans-Labrador Highway from Goose Bay towards Churchill Falls, from kilometre 172.5 to kilometre 248.5.
The company did not complete the work as scheduled, but it did finish 20 kilometres to blacktop and widened the road bed, laying the groundwork for the rest of the highway section it was contracted to pave. It was paid $11.8 million.
McGrath said the failure of Humber Valley Paving to complete the full terms of its contract, valued at about $20 million, was largely the result of forest fires in Labrador West.
In June 2013, a large fire intersected the existing road between the Quebec-Labrador border and the area where the paving company was working, meaning the feed of materials and some equipment was interrupted, he said.
“(It) wasn’t the government’s fault and it wasn’t the company’s fault. It was a forest fire. It was an act of God,” Marshall told reporters, when asked about Humber Valley Paving.
“They have not been paid a penny for the work that has not been completed.”
The decision to release the contractor without direct penalty was a considered decision, McGrath said.
“If I didn’t (release Humber Valley Paving), there was a strong possibility that I was looking at that piece of work would not be completed. And by the time you go through the bonding agency, No. 1 you’re probably shutting down a company, you’re putting Newfoundlanders and Labradorians out of work, and you still don’t have your project finished. So it was in the best interest to make the decision that I made,” he said.
With the aim of staying as close to on time and on budget as possible, he said he decided not to hold Humber Valley Paving’s feet to the fire, to avoid any legal battle and, instead, to get the work retendered for the coming construction season.
Keeping the time tight is expected to help avoid cost escalation.
Packaging the smaller piece of remaining work from Humber Valley Paving with a separate piece of work already on tap for the coming season, is also likely to result in lower any costs to the province, he said, when compared with tendering only the work remaining from the Humber Valley Paving contract.
“These are all things I weighed out,” he said.
This past fall, the province also released Penney Paving, based in Grand Falls-Windsor, from completing a little more than two kilometres of paving work for Happy Valley-Goose Bay.
And regardless of the need to re-tender, considering their work for the province since 1997, McGrath said he would have no hesitation awarding contracts to Humber Valley Paving in future.
Calls to the company for comment were not returned. A statement posted to the company’s website notes $10 million of work from undefined contracts on tap for Humber Valley Paving in the year to come.